Published: 14/11/2024 By ECAP
The British Pound weakened to a three-month low against the U.S. Dollar after yesterday’s data revealed slower wage growth in the UK. This eased inflation pressures, supporting the Bank of England's outlook on inflation. However, despite recent rate cuts, concerns over further BoE cuts could make the pound vulnerable. Ultimately, investors see a 15% chance of another rate cut in December, which could negatively impact sterling.The Euro lost further against the U.S. Dollar, erasing all its 2024 gains due to concerns over potential US trade policies impacting the Eurozone’s exports, particularly in manufactured goods. As the US economy strengthens and protectionist measures loom, the outlook for the Euro remains negative. The Eurozone’s export sector, particularly to the US, faces challenges, further weighing on the single currency’s performance in the markets.
The U.S. Dollar surged to a one-year high against a basket of currencies, driven by persistent inflation data. In fact, the dollar index rose nearly 0.5%, supported by sticky core CPI and an uncertain long-term rate outlook. Despite bets on a 25-basis-point rate cut in December, focus now turns to Federal Reserve Chair Jerome Powell’s upcoming speech for further insights on the future path of interest rates.
Data supplied by GC Partners